Millward Brown, Brazil
Ancient Chinese wisdom shows that the words “opportunity” and “crisis” are complementary concepts, or two sides of the same coin. In the brand scenario, where major changes take place, this duality represents a critical moment that requires short-term, effective action without losing its focus on relationship-building strategy and the brand background.
After two decades of economic stability, the 2015 financial crisis, combined with the disruptive scenario of the local political environment, puts brands at a crossroads never before experienced. More than ever, flexibility, creativity, optimism, resilience and many other adjectives attributed to Brazilians are the tools that brands will need too.
Facing new levels of unemployment and debt, the key words have become ‘conscious consumption’ i.e. buying what one can currently afford and meeting the basic needs. This is a significant change in Brazilians’ buying patterns. A plentiful table has always meant wealth, power and happiness.
The most important thing is to understand consumer needs in this situation and offer alternatives that can maintain the loyalty ties that brands have been building over time. In the categories without actual differentiation between brands, it becomes an interesting trade-off for cheaper brands and a choice of promotions and sale.
It’s worth nothing that learnings and historical monitoring of brand performance by BrandZ™ show that promotional and pricing strategies can undermine brand value, despite being effective at returning a more immediate result. And it shows that strong brands, after a critical situation, more quickly bounce back to previous levels as consumers return to their earlier patterns of consumption and purchase.
ALL TOGETHER NOW
Another seismic shift is being created by the sharing economy, which emerges as a great opportunity. ”Sharing” is the new trend that requires a breaking away from the traditional business models.
In the sharing economy there is no capital ownership nor is it subject to government regulation. Examples of shared businesses that have challenged the status quo are AIRBNB and UBER, in the accommodation and urban transportation (taxis) businesses respectively.
In these two examples, despite movements against them, the trend appears to be permanent. AIRBNB has even been nominated as a recognized accommodation source and recommended for the 2016 Olympic Games in Rio de Janeiro.
Shared home offices emerge; food items and cleaning products are collectively purchased by condominiums, buildings, family and friends. Sharing is the new buzzword: share talents in cooking, arts, crafts and also in professional projects. Changing the mindset has created new businesses opportunities.
Will the brands that participate in the sharing economy be the strongest brands in the future, following in Google’s and Facebook’s footsteps? How about conscious consumption? How can brands include in their scope and in their offering something that plays to this perspective?
The 2015 economic and political situation bring innovation opportunities for brands. The key is to find a way to both be part of the sharing economy and meet the need for conscious consumption without losing sight of what the brand stands for.